~National Get Smart About Credit Day~

National Get Smart About Credit Day

I remember when I was just starting out with my life…graduated high school and was ready to tackle the world…but how would I do that without a credit card?

Luckily I was 24 when I got my first credit card…it was a Sears Card (still have it) and I had watched enough friends go through “credit hell” to know that credit cards were bad news.  I also had a wise old grandfather who liked to remind me all the time that “credit cards were the devil.” he would say.  And by golly he was right.

Today is National Get Smart About Credit Day and I have decided to share a few things that I have learned along the way about credit and your credit score.

Don’t open a charge account every time a department store tells you they will give you a discount for opening one.  Department store credit cards are always higher in interest.  Usually averaging in around 23% or higher.  Not to mention that the more credit cards you have activated…the more it hurts your credit.

Pay attention to your debt to credit ratio.  This means that the amount of credit you have available should be higher than that you are using.  Much higher.  Your credit score with be majorly affected if you go above a 50% ratio.

Don’t close unused accounts.  This goes with the statement above.  If you have cards you don’t use it’s not always a good idea to close them because that also lowers your debt to credit ratio and believe it or not also takes points off your score.

When buying something via loan be aware that every inquiry on your credit hurts your credit score.  I am sure you are asking, then how am I supposed to find the best deal for a loan?  Staying on top of your credit score and having this information readily available with you can avoid them having to do an inquiry on your credit report. Credit Karma is a great place to keep track of your credit report and score and it’s free!  It really is.  If you have been with a particular bank for a long time your best bet would be to check with them first about obtaining a loan.  Especially when doing a car loan.

Don’t use a credit card unless you can pay it off each month.  I know that for some this is a very difficult task, so try to limit your use to only using credit cards for emergencies.  Not to obtain a want, but a need, rather.  Yes that new dress would be great hanging in the closet but just add up in your head how much you will actually pay for it after you have taken 6 months and lots of interest payments later to pay for it.

When getting a major credit card try to obtain one with a points perk. And make sure they don’t expire! You can build up points quickly by using the credit card for everyday purchases and making sure to pay it off before the grace period.  Just make sure you keep track of what you are spending so you are not surprised when you go to pay it.

National Get Smart About Credit Day

Zero interest or same as cash is awesome.  If you can purchase something with one of your cards and get so many months same as cash…go for it!  Just make sure that you pay the amount before the end, or the credit card will charge you all the back interest for not paying within the said time limit.  Best way to do this is to take the total of what you are going to owe and divide it by how many months you have to pay it and then pay that amount every month.  I am all for borrowing someone else’s money for free and not having to dig into my own savings for a big purchase.

Try and get lower interest rates.  When  your credit score is in good standing and you have been paying your bills on time call your credit card companies and see if they would be willing to offer you a lower rate or a special offer on a balance transfer.  Only do balance transfers if they are really going to save you a ton of money.  The hidden fees in balance transfers sometimes out weigh the money you think you are saving.

Always have one credit card in use.  To keep your credit score up you must always be using your credit.  Therefore even if you hate using credit cards, if you love having a good score then you will want to always have one card you are using at least once a month.  Even if you just make a small purchase with it and pay it off before interest.

Please note that I am not a financial advisor or banker, I am just sharing with you what I have learned through my history with credit.

Do you have anything to add to this with your personal history?  Please let me know in the comments.

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DomesticatedMomster

I am a mother of 5, a wife to 1, and a fully certified domesticated momster who likes to blog about motherhood, marriage, and anything else that pops into my crazy head all with a side of sarcasm and a glass of wine.

48 thoughts on “~National Get Smart About Credit Day~”

  1. I have had really bad luck with credit cards. I have two credit cards right now and that is it for me. A few years ago,I had four credit cards, three were from department stores and they ruined my credit. It was my own fault because I had a job at the time and when I lost that job I still had four cards to pay and I ended up letting them go into default because when you have to choose whether to feed your kids or pay a credit card bill, feeding the kids is going to come first every time. I knew better than to take out four of them though. I learned my lesson and will never do that again because you never know when you will be down on your luck. These are great tips! Visiting from #momsterlink

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    1. Credit fluctuates with everything. It just sucks that these days to even get good car insurance you need a good credit rating. Like somehow because we couldn’t pay a bill or don’t have any credit that somehow makes us a bad person. Ugh! just ugh! Thanks for linking up!

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  2. I too have seen loads of friends get out of their depth with credit cards, some are still effectively paying off debts that they ran up in their early 20’s, and we are all well into our 40’s now 😦 I do have a credit card that I use for all our grocery shopping as I earn points, and get vouchers back, but have it set up so it automatically gets paid off every month by direct debit. That way I’m not tempted to not pay back the full total which I probably would be if I actually had to look at the bill! I would advise to always use either a credit card or paypal for online purchases rather than a debit card. as they offer you much more protection if someone else manages to get hold of your details.

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    1. Yes! I agree with that too. It’s no fun trying to get your own money back from the bank. It’s sad that we aren’t taught more about credit and interest more in high school. Or how to file your taxes. Nothing like that …yet they want to push what x + y + z =! Who cares…teach our children real stuff so they won’t have to struggle later.

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  3. I never understood credit cards until I met my wife!

    One day, a friend and I went to buy a laptop from Curries. We both picked out what we wanted, went to see the sales adviser, and whilst my friend showed me his shiny new piece of hardware, I couldn’t show him mine. I was refused credit.

    “But,” I said, “I’ve never had a loan, never fallen behind on my mortgage payments, have a bank account that’s in credit and never had a credit card. What’s the problem?”

    Now I’m married, have very little income, have a mortgage, and two kids, I can buy whatever I want. It’s crazy.

    Thanks for hosting #momsterslink

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  4. As always, great post and excellent tips! I did not have a credit card until I was also in my early 20s. For those first years, I was soooo good about paying off my credit cards right away. Then, marriage and a baby came… ha Definitely complicates things …in a good way of course. ha! Thanks for hosting! #momsterslink

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  5. After going a bit mad with credit cards when I was younger (but still old enough to know better!) I totally agree with your grandfather 🙂 I will only use them in emergencies now and don’t carry them with me so there can be no impulse buys! Thanks for hosting #momsterslink
    Debbie

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  6. Really great tips here Trista. Credit cards can be really dangerous. It’s great you didn’t have one until you were old enough to be careful & know how to use it. #momsterlink

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    1. Yes. I was so upset when all my college friends were getting them and I couldn’t …it was a lot harder back then….now days you just say you’re a student and they are like here go mess up your credit! But mine was seriously a blessing in disguise.

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  7. Great points! I think FICO takes into account that you are applying for a loan when you get a flurry of inquiries, and doesn’t ding your credit as much as it would for an equal number of individual inquiries (or at least that’s what Suze Orman said at one point). The only thing I might add is to check with your local credit union for a loan–they sometimes have lower rates. Thanks for the tips!

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  8. I love my Discover card because of the points system. I save the points up until Christmas time and then shop on Amazon with them. It really helps out a lot! I hardly ever carry cash, and I either use my credit or debit card wherever I go. With just one income coming into the household, it’s easier to use the card than to make a trip to the bank to get cash. I think that one of the most valuable tips that you offered was to make sure that you are in a spot where you can make the payments before you charge. That’s where all the trouble starts! Thank you for the tips, T! xx #momsterslink

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    1. I don’t carry cash either…and even if I ever do have some it flies out of my purse at a fast speed! Using a card helps keep track of where every penny goes and I like knowing that. Thanks for linking up lovely 😘

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  9. So informative! Thank you! I fell into the trap of store cards and credit when I was a student, took me years to pay off. For that reason we don’t have credit cards these days, if we want something we save up for it and pay for it in full. It means that we sometimes have to go without but I sleep easier for knowing that we don’t have any debts!!! #momsterslink

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  10. I have one card I clear every month to keep my ‘credit up’ and I always turn down sore cards unless its a big ticket purchase the discount is worth it i.e. we brought our sofa and then paid it off the following day but the discount was immense! Great tips 🙂 So many people live on tick and its a time bomb waiting to go off! thanks for hosting #momsterslink x

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  11. Late commenting for #momsterslink but we use our credit card for our daily living expenses and pay it off at the end of every month, the cash is set against our mortgage. It works for us but probably only because my hubby is so disciplined! In saying that though we own everything including cars, furniture and feel very secure in the way things are structured. I fear for others who are in credit crisis because it would be a bloody scary place! Mel xx

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    1. No worries Mel…you’re not late…hell I am still commenting on last weeks and now this weeks but I never leave anyone I commented …well except the linkers and leavers lol but never anyone who’s in my “posse” 😉 I too feel so blessed that we aren’t in loads of credit card debt. It’s just so easy to do. Thanks for linking up and for your support with #momsterslink.

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  12. Great advice. Definitely agree with don’t use it if you can’t pay it off each month. Credit cards can really be a time saver and keep you from dealing with cash or checks for regular purchases, but must be paid off each month or things can add up fast.

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    1. They really need to teach about credit cards, financing, and how to do your taxes since it’s something we are all required to do. Who cares about algebra unless you plan to work for NASA or become an architect right?

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